(a) Central Bank of Myanmar Sets New Reserve Ratio and Interest Rate on Average Excess Reserves
On 30 April 2024, the Central Bank of Myanmar ("CBM") issued a new directive which primarily focuses on two aspects: (i) the minimum reserve ratio that banks must maintain in Myanmar Kyat; and (ii) the interest rate that CBM must pay on average excess reserves maintained by banks with CBM. Under the new directive, CBM has increased the minimum reserve requirement ratio for banks in Myanmar Kyat from 3.5% to 3.75%. In this regard, CBM aims to manage the increase in circulating capital and curb the rise in inflation prudently with this adjustment. State-owned banks, private banks (both Myanmar and foreign-owned) must maintain a minimum reserve requirement ratio of 3.75% comprising 3% from the banks' deposits with CBM and 0.75% from cash held by the banks.
(b) Central Bank of Myanmar Limits Digital Payments and Transactions
Effective 12 June 2024, CBM has set new transaction limits in carrying out digital payments and transactions. Banks and mobile financial service providers are to use the Central Bank of Myanmar Financial Network System (CBM-NET), which includes the Real-Time Gross Settlement (RTGS) for large payments, the Automated Clearing House ("ACH") for small payments and a digital payment switch for QR-based transactions. This approach by CBM is to provide non-cash payments and ensure security of digital transactions nationwide.
The revised regulations include directives on the following:
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Person-to-Person (P2P) Payments: Limited to MMK1 million per transaction and a maximum of MMK5 million daily;
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Person-to-Merchant (P2M) Payments: Maximum daily transaction amount of MMK10 million, covering sectors such as gold shops, electronic stores, construction material stores, and healthcare centres;
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Mobile Money Accounts: Maximum balance limit of MMK10 million, with excess funds to be transferred daily to an associated bank account;
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Mobile Banking Payments: P2P and government payments of up to MMK10 million are required to use the CBM-NET ACH Function;
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Large Payments: MMK10 million or more transactions are required to use the CBM-NET System B2B Function; and
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ACH Allocation: Banks are to maintain sufficient Debit Cap funds for uninterrupted access to the CBM-NET ACH Function.
(c) Central Bank of Myanmar Issues Warning against Crypto Trading
On 24 May 2024, CBM issued a warning against the sale, purchase, exchange or unauthorised money transfers through use of digital currencies. A failure to comply will result in the closure of bank accounts, and legal penalties which include imprisonment and fines in accordance with the Anti-Money Laundering Law and Financial Institutions Law. This action is related to CBM's Notification 9/ 2020 which prohibits every individual residing in Myanmar from the unregulated use of digital currencies which include cryptocurrencies such as Bitcoin (BTC), Litecoin (LTD) and Ethereum (ETH), as well as transactions through personal Facebook accounts and websites.
